David Payne '88

May 18, 2010Duke Law News

David Payne’s business mission is “to keep Internet content free with a better ad model,” one that allows online media clients to serve a video ad in front of any type of content. The founder and CEO of Atlanta-based ShortTail Media, Payne got the idea for his entrepreneurial venture while heading CNN.com from 2004 to 2008 as senior vice president and general manager. He was frustrated by the two-dimensional display ads that generate revenue from the advertiser only when a user clicks on them. It’s a problem endemic to digital publishing, he says, and is leading high-traffic, high-value, and high-cost news providers like The New York Times to launch plans to charge readers for access to their content.

“This is about turning your computer screen into a television screen and then, over time, increasing the commercial load and expectation that users have,” Payne explains. “At that point, the website can remain free by charging advertisers more for its ad space.”

The target audience for ads already has shifted online, he observes. “Younger consumers already spend more time on their laptops than they do watching television. If you want to have a brand message reach that audience, you need to serve a quality ad, and the highest-quality ad you can get is a 15-30 second video spot.” Brand advertisers who currently have to produce custom ads for the Internet would be able to leverage production costs from their television ads, he adds.

A series of somewhat nontraditional career moves — and both a high tolerance and appetite for risk, change, and challenge — prepared Payne for his entry into the entrepreneurial sector. The first came two years after his graduation from Duke Law, when he left his associate’s position at Gibson Dunn & Crutcher in Washington, D.C., to join the Office of the U.S. Attorney in the District of Columbia. The move cut his pay — but freed him from billing hours, he jokes — and allowed him to try numerous cases over the course of three years.

“Crack cocaine was the drug of choice and D.C. was the murder capital of the world at that time — we had homicides pretty much every day,” he recalls. He is particularly proud of his legal work and community outreach on a search warrant and “sting” operation that effectively liberated a neighborhood from domination by a violent street gang. And while his work as an assistant U.S. attorney seems far removed from his current activities, both involve “coming into a room and explaining your case” to a group of people, be they jurors, investors, or clients, he points out.

Having worked in television news prior to entering law school — he also interned on “Meet the Press” after his 1L year — Payne next followed his passion for media to Turner Broadcasting in Atlanta. He started as a copyright lawyer, researching sequel and licensing rights to the various video libraries the company owned. He admits that he had little interest in copyright law, but had his eye on other Turner assets: its sports teams and CNN. While keeping up with his rights work for the entertainment group, he volunteered to work with Turner Sports on the side, whenever the opportunity arose. And when Turner Sports’ counsel moved to the business side of the company, Payne moved into his job, becoming counsel to its professional sports teams, the Atlanta Braves, Hawks, and later, Thrashers, as well as its television production arm.

“The breadth and scope of things I got to do as a lawyer at Turner Sports was unbelievable — contracts, events, distribution, sponsorships, television agreements, everything,” he says. He soon added “business affairs” to his roster of duties at Turner Sports, negotiating the business, not just the legal, terms of deals.

“That was one of the key pivots for me in getting to where I am now,” he says. “I negotiated deals with all of our talent and then I would go paper them.” The deals went beyond “talent”; among others, he was part of the team that reached agreement with the City of Atlanta for the conversion of its Olympic stadium to Turner Field and for the construction of the Atlanta Arena.

Payne “left legal behind entirely” in 2000 when he became general manager of CNNSI Interactive, an online joint venture between CNN and Sports Illustrated. “It didn’t mean I stopped thinking like a lawyer, but it was the critical break for me,” he says. “I started managing people from all different backgrounds and skill sets, from marketers to software engineers.” A year later, he took over business operations for all of CNN’s networks and websites.

After a few years in CNN Corporate, Payne had the opportunity to really get in the weeds of a business, by convincing his boss to let him focus full-time on CNN’s fastest-growing business, CNN.com. Heading CNN.com offered Payne the opportunity to fully engage in building and growing a $100m business. “We completely redid CNN.com, from soup to nuts,” he says. “I had the opportunity to blend my passion for journalism with a vision for a new set of video, mobile and online products — getting my hands into the technology, ad systems, marketing, software development, and design aesthetics.” Creating CNN Pipeline, a multi-screen, broadband, live Internet service providing access to all of CNN’s live streams, was “way ahead of its time” was particularly satisfying, he says.

“Building CNN Pipeline from ideation to 24/7 operations involved pulling an extraordinarily diverse set of people together on a single vision to deliver multi-channel, user-selected, live video news online. Among others, we drafted the broadcast engineering group, the software engineers, the television marketing team, , technical support, customer service, and the facilities people to build CNN’s first high-definition control room. It took a lot of mobilizing and a lot of convincing and a lot of compromise — traits I had honed as a prosecutor convincing jurors and/or judges.”

Now heading his own company, Payne observes that he still calls on his legal skills and knowledge as needed. What’s changed most in his career, he says, is the way he thinks about decision-making. “A lawyer’s job is to advise his or her clients about the risks and then let them decide what to do. As a businessman, your job is to make the decisions. I’ll take that job anytime.”